Wednesday, March 15, 2017

The wealthy (1%?) and the feelings towards them

My Girlfriend was watching John Oliver a little before I left for work this morning and in the episode which main segment revolved around "Patient Protection and Affordable Care Act and Republican replacement proposals", John Oliver mentioned the 1%. By and large, the 1% are praised by Conservatives and attacked by Liberals yet I can understand both sides of the argument (when I mention the 1%, I am referring to the majority of wealthy of Americans, including the 1%.)

As someone who wishes to be an entrepreneur, I have made effort to do what I need to do to start businesses. I do not like working for someone else to make them rich. I understand that I need a job to pay my bills and keep food on the table but I hope to one day be an employer and not an employee. For anyone unfamiliar with the process of starting a business it is a difficult process. For those interesting in the steps to start a business the steps can be found at sba.gov. Not only is the process to start a business difficult, it can also be costly. In my attempt to start a non-profit organization I have so far paid close to $1000 just to the Secretary of State office and I still have to pay another $500+ for more forms to be recorded. That's not easy for someone living paycheck to paycheck like I am.

Knowing how costly it is for me to start a business the right way, I can understand why more people do not open businesses. With business startups being costly it is obviously easier for someone who already has wealth to start businesses. Because 50% of small businesses fail in the first five years many people avoid attempting to open their own business instead opting for the security of working for someone else. In the case of the non-profit I am still working on getting operational, if it fails that's a lot of money I am out that could have been saved or used for other things. The failure rate makes opening a business less risky for the 1% since they do not rely as heavily on regular paychecks. In fact this article by Salon summarizes my point quite well. Knowing more of the 1% are able to start businesses than everyday people, and businesses create jobs, it's not wonder Conservatives praise (or do not oppose) the 1%.

I am not particularly a fan of the 1%. People with wealth and power always seek to retain their wealth and power. Usually the rich and powerful maintain their wealth and power at the expense of those less fortunate. A good example that is recognized by many is the Dakota Access Pipeline. According to the article from Salon, "At maximum capacity the pipeline is a $1.7 billion-a-year revenue cash cow for Energy Transfer Partners". By making the process to start a business so complicated and expensive the 1% do not have to worry as much about potential competition and their wealth helps them bully their way to getting what they want. The wealthy lobby politicians for political and legal benefit as well as donate to political campaigns. A very good organization to track money "donated" to politicians is OpenSecrets.org. I could go on and on about how businesses influence politics. Instead I'll just leave this link here about the Top 5 Industries Lobbying Against Cannabis Legalization.

Now, I can understand why Liberals oppose the 1% so much. They have become so entrenched and had their fingers in politics for so long that they are nearly unopposed. The 1% do in fact pay a lot in taxes according to PEW research center. The issue is not the 1% paying a high percentage in taxes, the issue is the tax loopholes. The wealthy pay accountants very well to find ways they can legally pay as little in taxes as possible. Everyone tries to pay as little as possible in taxes. I cannot and will not condemn the 1% for doing exactly what I would do in their situation. I can blame the politicians who pass laws making those loopholes possible. According to Bankrate the top earners pay 39.6% in taxes while the bottom only pays 10%. The issue, as I mentioned is the loopholes. According to realtor.com the tax rate for Capital Gains tax on Real Estate earnings is capped at 20%. So if the wealthy earn their money through Real Estate they pay less in taxes than someone who made the same amount from working. As I said, the wealthy are able to influence politicians to make these loopholes a possibility. Every loophole that is made allows the wealthy to become more entrenched.

Another complication with taxing the 1% even more is the very real possibility they will leave the US. The 1% are already wealthy and as with most people they look for ways to make more money. The 1% do not have to live in the US. There is no law preventing the 1% from moving to another country. If we increase the tax or penalize the 1% in some other way we risk the 1% moving out of the US which could prevent additional jobs being made. If the 1% do move away we may see many of the legal requirements to start a job becoming more lax to allow small businesses to be started more easily. Who knows what would happen. I do know if I were a member of the 1% and I lived in a country that tried to take a ton of money from me every year I would move to a country that would allow me to keep more of my money.

Everywhere you look the laws favor the 1% (the rich and powerful). To do anything but work for someone else we face an uphill battle. To merely open a lawn care business we have to jump through hoops. There are resources available from the Small Business Association that help out with everything but it is still too difficult for many people to accomplish. I'm not sure if the 1% are a necessary evil at this point in our history, but I do wish it were easier for an average citizen to start a business.

This is just another instance of Ron Swanson being my spirit animal. I think Ron Swanson (from Parks and Rec) puts starting a business perfectly: